Economy case studies: the builder and the private eye

Builder David Melling: in the current economic climate, he says, 'more people are staying where they are and extending rather than trying to move.' Photograph: Christopher Thomond for the Guardian

Builders have generally had a torrid few years since the economic downturn. The austerity drive and recession meant some big construction projects being shelved, while in many regions housing market activity slumped.

David Melling has been in the trade since leaving school 35 years ago.

"Last year was probably about our toughest year," he says. This year is better and his family business, Mason Knight, has been buoyed by its relatively wealthy setting in south Cumbria, he says.

But for the sector as a whole, which expanded by a 0.9% in the second quarter, according to official figures , published Thursday, things remain challenging.

"It's been very, very, quiet. We have been busy enough, we have got enough work, but we have not been inundated. But we have an extension job at the minute and another in September that should keep us busy till Christmas."

While Melling thinks the trade is over the worst, he has noticed a change in the nature of building work. "More people are staying where they are and extending rather than trying to move."

Customers are more cautious as they grapple with meagre pay rises that fail to keep pace with rising food, fuel and utility costs.

"People are more careful now. Everything is down to price. Most people are getting three or four prices whereas they used to just say 'come and do this'. So people are a bit more careful with their money."

While construction only accounts for 6.8% of the UK economy it has still dragged down growth in recent quarters. It took a 0.1 percentage point off GDP growth in the first quarter of this year, having knocked a 0.6 percentage point off in 2012 as a whole.

The latest surveys of construction companies have been relatively upbeat, with signs the government's controversial plans to boost the housing market are reviving activity.

The reports echo the comments from housebuilders such as Barratt Developments and Bovis Homes that trading picked up after the government announced plans in the budget to help struggling house buyers.

For Matt Thomas, a private investigator, business is strong. "We have pretty much ridden the downturn. We do get ups and downs but you find if people have problems, whether personal or business problems, they want it sorted out sooner rather than later."

The London-based private detective agency North Court Investigations does jobs for a range of clients – from individuals tracking long-lost relatives to large companies checking up on staff, including those on long-term sick leave.

"We do surveillance and find they might be playing football at the weekend or something," explains Thomas. The agency, which has 300 investigators to call on rather than a big full-time team, also does hand-writing analysis, matrimonial investigations and computer forensics, which can determine if former employees are using previous contacts to set up rival businesses.

Prices start at £400 for a simple trace and can rise to £30,000 or more for big business investigations.

PIs stand alongside lawyers, recruitment firms and advertisers as part of a wider business-to-business subsector of the economy, which has generally had a pick-up in activity in recent months.

According to the data specialist Markit, which compiles the PMI surveys on economic activity, business-to-business was the fastest growing part of Britain's dominant service sector in the second quarter.

With disposable incomes squeezed, Thomas says, private clients are spending less but there is plenty of work from corporate clients, who use North Court as well as big international agencies like Kroll for extra checks ahead of deals.

"It is probably easier to get money out of bigger companies," says Thomas.

Beyond business clients, there has also been an improvement – in the south of the UK, he says. "People do have a little bit more disposable cash. We class ourselves as more of a luxury service. I do think people are more keen to put their hand in their pocket … London is doing best, Oxford is doing well, Cardiff not too badly – there has been a big decline in Leeds and Manchester."

While other UK businesses have been hit by the general economic slump over recent years, there has been one big cultural change that has buoyed private investigators, he adds. "In the last five years, since the start of the turn down in the economic crisis, more people are having online relationships." So say you meet a guy in the US … and after six months you want to meet, you ask us to check his background. One of the most popular things for us is to do background checks."

View the original article here